Japan never seems to lose faith in easy-money.
Despite the fact that throwing easy money at their economy has failed to revive their economy in a sustainable fashion for two decades, Japan’s central bank today decided in an emergency meeting to open the money spigot wide open.
Sure they are fighting massive deflation, but perhaps they should just let the deflation happen. This kind of thinking would have saved them two decades of stagnation.
WSJ: The Bank of Japan will lend up to 10 trillion yen (about $116 billion) in three-month funds at the 0.1% policy rate, accepting Japanese government bonds, corporate bonds, commercial paper and loans on deeds as collateral.
The new facility should “further enhance easy monetary conditions” and is designed to “encourage a further decline in longer term interest rates,” the BOJ said in a statement. The central bank said it was important to act now to help pull the economy out of deflation, and vowed to cooperate with the government to try to revive the economy.
The BOJ’s board members voted unanimously to leave the unsecured overnight call loan rate at a rock-bottom 0.1%, where it has been since December.